September Posts New Gains for Job Growth and Business Confidence

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The Bureau of Labor Statistics on Friday released a positive September jobs report, with a gain of 134,000 jobs and the lowest unemployment rate in 50 years. These reflect a strong economy and continued business confidence.

In addition to this, the report showed gains in the total labor force, wages, and employment in crucial sectors that have been a focus of the Trump administration.

Notable details of the September report include a decline in the unemployment rates for adult women (3.3 percent) and whites (3.3 percent), and near record unemployment lows continued for African-Americans (6.0 percent) and Hispanics (4.5 percent).

We saw gains in crucial sectors such as professional and business services (+54,000 jobs), health care (+26,000 jobs), transportation and warehousing (+24,000 jobs), construction (+23,000 jobs), and mining (+6,000 jobs).

September also saw strong gains in manufacturing (+18,000). Some wondered whether the August dip in manufacturing employment (-3,000) was a harbinger of coming weakness in the sector, but the strong showing in September, along with manufacturing confidence continuing at all-time highs, have gone a long way to allay that fear.

While the labor force participation rate remained unchanged at 62.7 percent, we saw an additional 150,000 people enter the work force in September, reflecting strong demand in the job market. While this is positive, it does not make up for the loss in August.
Meanwhile, wages continue a slow but steady climb, rising 8 cents to $27.24, while average hourly earnings have risen by 73 cents, or 2.8 percent, over the last year.

The rise in wages, bonuses, and other benefits demonstrates that employers are looking to attract more people back into a workforce to fill open jobs.

On a more troubling note, the number of persons employed part-time for economic reasons, or involuntary part-time workers, increased by 263,000 to 4.6 million in September. In addition, the number of discouraged workers, or people currently not looking for work because they believe no jobs are available for them, still remains stubborn.

While the number of jobs created is lower than expert predictions, dramatic upward revisions from July and August (+87,000 jobs) help soften the blow.

The recently negotiated replacement for NAFTA provides encouraging news on the trade front. Fears of a downward-spiraling trade war and the potential damage to economic growth have been alleviated to a degree.

In addition to securing solid trade agreements, the economy needs long-run certainty on taxes. Last year’s tax cuts have been a huge boon for job growth, but Tax Reform 2.0 is needed to lock in those benefits.